30 Questions
What is the formula for computing simple interest?
I = Pin
Who is a lender or creditor?
An individual who invests money or makes funds available
What does the term 'maturity value' refer to in a loan context?
The total repayment amount a borrower has to pay at maturity
In compound interest, what does 'interest is computed on the accumulated past interest' mean?
Interest is calculated on the principal and past interest earned
What does the formula F = P(1 + in) represent?
An incorrect formula for compound interest
What does 'revised by Department Chair' signify in the provided text?
A person responsible for reviewing course module documents
In ordinary simple interest, how many days are considered in a banker's year?
360 days
How many days are considered in exact simple interest for an ordinary year?
365 days
Which of the following is NOT a characteristic of leap years according to the text?
Including the century years like 1900
If the number of days in an interest period is 68, the formula to calculate the ordinary simple interest would be:
$P \times I \times \frac{68}{360}$
If the interest period has 50 days in a leap year, how much would be the exact simple interest using a principal amount P and interest rate I?
$P \times I \times \frac{50}{366}$
What is the nominal rate of interest for an account that compounds quarterly if the quoted rate is 12%?
4%
What is the total number of days from July 12 to September 12?
62 days
If a sum of ₱5,000 is deposited at a nominal rate of interest of 6% compounded semi-annually, what will it become after 2 years?
₱6,010.40
In the compound interest formula 𝑃 = 𝐹 / (1 + 𝑖)^𝑡, what does 𝑃 represent?
Present value
If an amount grows to ₱15,000 after 5 years at an interest rate of 8% compounded annually, what was the initial principal amount?
₱10,000
For an account compounding quarterly at a nominal rate of 6%, what is the interest rate per period?
2.25%
If an investment triples in value after 12 years at an annual interest rate of 10%, what was the effective annual rate of compound interest?
15%
What is a potential drawback of obtaining capital through long-term loans?
High interest rates
What factor can lead to the end of a partnership according to the text?
Provision for settlement of disputes
What usually happens when partners have almost equal shares in a business according to the text?
Divided authority among partners
In case of bankruptcy, who is liable for all the liabilities of the enterprise?
One partner
What is a key provision mentioned in a partnership contract document?
Insurance on lives of partners
What does the accounting period provision in a partnership contract refer to?
Duration for financial reporting
What does working capital refer to?
Funds required for daily operations
Which type of working capital is needed at the beginning of operations?
Initial working capital
What is the main advantage of a sole proprietorship?
Ease of organization
Who bears all the losses in a sole proprietorship?
Sole proprietor
Which type of working capital is usually smaller, initial or regular?
Regular working capital
What is the simplest form of business organization according to the text?
Sole proprietorship
Test your knowledge on continuous compounding and nominal rate of interest with this quiz. Explore equations like F = P(1 + i)^n and understand the calculations involved. Learn about the nominal rate of interest and its application in compound interest calculations.
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